Keeping your partner's family members out of the business
A Buy-Sell Agreement determines who is entitled to the shares of a business if a partner is no longer able to be a part of it. If you don’t have this agreement in place, your partners’ next of kin and heirs will take over that part of the company.
These agreements:
- Develop an exit plan for business partners.
- Establish a fair value price for shares.
- Establishe a business continuity plan.
- Are tied up with a life insurance policy.
The breakup of a partnership has the potential to be messy. It can become hard for former partners to agree on the terms of the split if those terms aren’t set in stone (or at least in writing). A buy-sell agreement spells out most of the terms and conditions and reduce headaches.
Buy-Sell agreements help eliminate disagreements in a buy out offer, as the agreement establishes those figures ahead of time. The agreements establish a business continuity plan. Few would ever be in favor of unnecessary disruptions to their business operations. But that’s exactly what you risk without a Buy-Sell Agreement. Any unexpected death, illness could cause chaos for your business. With a continuity plan, you can guard against these challenges.
Buy-Sell agreements tied up with a life insurance policy. ost business partners take out life insurance policies against one another when they sign Buy-Sell agreements. This helps make sure that the other parties have access to money necessary to buy out the deceased or disabled partner's shares.
To learn more contact us.
Arkhurst & Abdellah Solicitors, Creative Tower 17th & 18th Floors, P. O. Box 4422, Fujairah, UAE.
Telephone: +971525359633.